Rayonier (NYSE:RYN) today reported third quarter net income of
$55.0 million, or 70 cents per share. This compares to $42.8
million, or 55 cents per share, in the second quarter and $75.0
million, or 96 cents per share, in third quarter 2005. Results
included a special item gain of $5.3 million, or 7 cents per share,
for prior years' IRS audit settlements, including associated
interest expense. Second quarter included a special item gain of
$6.5 million, or 8 cents per share, while third quarter 2005
included three special item gains totaling $39.1 million, or 50
cents per share. Lee Nutter, Chairman, President and CEO, said: �As
expected, results were very good, reflecting the balance of our
three core businesses. Particularly strong results were achieved by
Performance Fibers, which continues to experience growing demand
for its high-value cellulose specialties, and our Real Estate
business, which closed several significant transactions � including
our first participation agreement. In addition to realizing
immediate proceeds from the sale, the agreement allows us to share
in future revenues generated from the developed property.� Third
quarter results, excluding special items, were above the second
quarter primarily due to the increased value of real estate
transactions and reduced performance fibers costs, partly offset by
a normal seasonal decline in Northwest timber sales volume and
lower prices. Compared to third quarter 2005, earnings improved
primarily due to higher real estate sales and stronger cellulose
specialties prices, partly offset by lumber prices. Sales for the
third quarter of $312 million were comparable to the second quarter
and $13 million above third quarter 2005. Cash provided by
operating activities of $222 million for the nine months ended
September 30 was $16 million above the comparable period in 2005
primarily due to lower working capital requirements. For the same
period, Cash Available for Distribution (CAD) of $146 million was
$15 million below 2005 mainly due to capital spending for a major
energy cost reduction project, partly offset by reduced working
capital requirements. (CAD is a non-GAAP measure defined and
reconciled to GAAP in the attached exhibits.) Debt of $556 million
and a debt-to-capital ratio of 37.8 percent at quarter-end were $2
million and 0.9 percent below year-end 2005, respectively. Cash at
September 30 was $169 million. Timber Sales of $44 million and
operating income of $17 million were $17 million and $13 million
below second quarter, respectively, primarily due to the normal
seasonal decline in the Northwest and unfavorable volume and price
in the Southeast, but were comparable to third quarter 2005. Real
Estate Sales of $46 million and operating income of $38 million
were $29 million and $27 million above second quarter,
respectively, due to a significant increase in the number of higher
value development acres sold, partly offset by fewer rural acres
sold. Sales and operating income rose $19 million and $16 million,
respectively, over third quarter 2005, due to an increase in both
the quantity and per acre price of development acres sold,
partially offset by fewer rural acres sold. The strong average per
acre price for development property primarily was due to location.
Performance Fibers Sales of $164 million were $2 million below
second quarter but operating income increased $6 million to $21
million primarily due to improved production resulting in lower
manufacturing costs, partially offset by sales mix. Compared to
third quarter 2005, sales increased $4 million mainly due to higher
cellulose specialties prices, partly offset by the sales mix.
Operating income improved $6 million primarily due to the higher
cellulose specialties prices, partly offset by energy costs. Wood
Products Due to a dramatic drop in lumber prices, sales of $26
million and an operating loss of $3 million were $6 million and $5
million below second quarter, respectively, and $9 million and $8
million below third quarter 2005. Other Operations Sales of $32
million were $4 million below second quarter while essentially
breakeven operating income was unchanged. Sales and operating
income were basically unchanged from third quarter 2005. Other
Items Corporate expenses of $7.1 million were comparable to second
quarter and $3.1 million below third quarter 2005, primarily due to
lower stock price-based incentive compensation. Interest expense of
$11.0 million was $0.9 million below second quarter primarily due
to lower tax interest expense, but $1.2 million above third quarter
2005 mainly due to increased tax interest expense and higher
interest rates. Interest and other income of $3.0 million was $1.2
million above second quarter mainly due to higher interest income,
but $8.9 million below third quarter 2005, largely due to an
arbitration award in that quarter. Excluding discrete items, the
year-to-date effective tax rate was 14.6 percent compared to 13.9
percent for the same period in 2005 due to the absence of research
and development credits. The third quarter tax expense of $2.7
million included the previously noted favorable settlement of tax
audits for prior years of $4.8 million (excluding interest).
Additionally, three other discrete items netted to a $0.6 million
benefit in the quarter (see Schedule J for details). Outlook The
company said it continues to expect that full year earnings will be
above 2005. Fourth quarter results should be less than the third
quarter (excluding special items), primarily due to lower real
estate sales, but somewhat above fourth quarter 2005 because of
higher cellulose specialties prices, reduced Performance Fibers
costs and increased real estate sales, partly offset by weaker
lumber prices. �Although real estate and timber markets are
somewhat uncertain, we remain optimistic given the mix of our
businesses, their geographic breadth and the balance they provide,�
Nutter said. �Global demand remains exceptionally strong for our
high-value specialty cellulose products and is expected to result
in significant price improvement with the completion of annual
pricing negotiations under multi-year contracts. In Real Estate, we
will continue to focus on maximizing the value of our diverse
properties, including the pursuit of additional participation
transactions. Although our Timber business has begun to feel some
effects of the housing slowdown, we expect the impact will be
softened somewhat by the geographical diversity of our holdings.�
About Rayonier Rayonier is a leading international forest products
company with three core businesses: Timber, Real Estate and
Performance Fibers. It owns, leases or manages 2.5 million acres of
timber and land in the U.S., New Zealand and Australia. The
company�s holdings include approximately 200,000 acres with
residential and commercial development potential along the
fast-growing Interstate 95 corridor between Savannah, Georgia, and
Daytona Beach, Florida. Its Performance Fibers business is the
world�s leading producer of high-value specialty cellulose.
Approximately 40 percent of the company�s sales are outside the
U.S. to customers in more than 50 countries. Except for historical
information, the statements made in this press release are
�forward-looking statements� made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995
and other federal securities laws. These forward-looking
statements, which include statements regarding anticipated
earnings, revenues, volumes, pricing, costs and other statements
relating to Rayonier�s financial and operational performance, in
some cases are identified by the use of words such as �may,�
�will,� �should,� �expect,� �estimate,� �believe,� �anticipate� and
other similar language. The following important factors, among
others, could cause actual results to differ materially from those
expressed in the forward-looking statements contained in this
release: changes in global market trends and world events; interest
rate and currency movements; fluctuations in demand for, or supply
of, cellulose specialty products, absorbent materials, timber, wood
products or real estate and entry of new competitors into these
markets; adverse weather conditions affecting production, timber
availability and sales, or distribution; changes in production
costs for wood products or performance fibers, particularly for raw
materials such as wood, energy and chemicals; unexpected delays in
the entry into or closing of real estate sale transactions; changes
in law, policy or political environment that might condition, limit
or restrict the development of real estate; the ability of the
company to identify and complete timberland and higher-value real
estate acquisitions; the company's ability to continue to qualify
as a REIT; the ability of the company to complete tax-efficient
exchanges of real estate; and implementation or revision of
governmental policies and regulations affecting the environment,
endangered species, timber harvesting, import and export controls
or taxes, including changes in tax laws that could reduce the
benefits associated with REIT status. For additional factors that
could impact future results, please see the company's most recent
Form 10-K on file with the Securities and Exchange Commission.
Rayonier assumes no obligation to update these statements except as
may be required by law. A conference call will be held on Tuesday,
October 24, at 2:00 p.m. EDT to discuss these results. Interested
parties are invited to listen to the live webcast by logging onto
www.rayonier.com and following the link. Supplemental materials
will be available at the website. A replay will be available on the
site shortly after the call where it will be archived for one
month. Also, investors may access the �listen only� conference call
by dialing 913-981-5584. For further information, visit the
company�s web site at www.rayonier.com. Complimentary copies of
Rayonier press releases and other financial documents are also
available by mail or fax by calling 1-800-RYN-7611. RAYONIER
FINANCIAL HIGHLIGHTS SEPTEMBER 30, 2006 (unaudited) (millions of
dollars, except per share information) � Three Months Ended Nine
Months Ended Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30, 2006�
2006� 2005� 2006� 2005� Profitability Sales $ 312.0� $ 312.1� $
299.5� $ 901.3� $ 864.8� Operating income $ 65.7� $ 51.0� $ 51.0� $
154.0� $ 147.2� Income from continuing operations $ 55.0� $ 42.8� $
74.9� $ 121.1� $ 151.3� Discontinued operations $ -� $ -� $ 0.1� $
-� $ (24.9) Net income $ 55.0� $ 42.8� $ 75.0� $ 121.1� $ 126.4�
Income per diluted common share Continuing operations $ 0.70� $
0.55� $ 0.96� $ 1.55� $ 1.95� Net income $ 0.70� $ 0.55� $ 0.96� $
1.55� $ 1.63� Pro forma income from continuing operations (a) $
0.63� $ 0.47� $ 0.46� $ 1.40� $ 1.23� Operating income as a percent
of sales 21.1% 16.3% 17.0% 17.1% 17.0% ROE (b) 15.0% 12.9% 14.7%
15.0% 14.7% � Nine Months Ended Sept. 30, 2006� 2005� Capital
Resources and Liquidity Continuing operations: Cash provided by
operating activities $ 222.3� $ 206.1� Cash used for investing
activities $ (99.4) $ (77.9) Cash used for financing activities $
(101.5) $ (150.0) Adjusted EBITDA (c) (e) $ 263.5� $ 275.0� Cash
Available for Distribution (CAD) (d) (e) $ 146.3� $ 161.6�
(Repayment)/borrowing of debt, net $ (2.7) $ (67.8) � 09/30/06�
12/31/05� Debt $ 556.3� $ 558.5� Debt / capital 37.8% 38.7% Cash $
168.8� $ 146.2� Average diluted shares outstanding (millions) 78.0�
77.6� � (a), (b), (c), (d) and (e), see Schedule B. � � - A -
RAYONIER FOOTNOTES FOR SCHEDULE A SEPTEMBER 30, 2006 (unaudited) �
� (a) Pro forma income from continuing operations is a non-GAAP
measure. See Schedule H for reconciliation to the nearest GAAP
measure. � (b) Year-to-date percentages are annualized; major land
sales are not. � (c) Adjusted EBITDA is defined as earnings from
continuing operations before interest, taxes, depreciation,
depletion, amortization and the non-cash cost basis of real estate
sold. Adjusted EBITDA is a non-GAAP measure of operating cash
generating capacity of the Company. See reconciliation on Schedule
I. � (d) Cash Available for Distribution (CAD) is defined as cash
provided by operating activities of continuing operations less
capital spending, adjusted for equity based compensation amounts,
proceeds from matured energy forward contracts, the tax benefits
associated with certain strategic acquisitions and the change in
committed cash. CAD is a non-GAAP measure of cash generated during
a period that is available for dividend distribution, repurchase of
the Company�s common shares, debt reduction and for strategic
acquisitions net of associated financing. See reconciliation on
Schedule H. � (e) Management considers these measures to be
important to estimate the enterprise and shareholder values of the
Company as a whole and of its core segments, and for allocating
capital resources. In addition, analysts, investors and creditors
use these measures when analyzing the financial condition and cash
generating ability of the Company. � - B - RAYONIER CONDENSED
STATEMENTS OF CONSOLIDATED INCOME SEPTEMBER 30, 2006 (unaudited)
(millions of dollars, except per share information) � Three Months
Ended Nine Months Ended Sept. 30, June 30, Sept. 30, Sept. 30,
Sept. 30, 2006� 2006� 2005� 2006� 2005� � Sales $ 312.0� $ 312.1� $
299.5� $ 901.3� $ 864.8� Costs and expenses Cost of sales 231.5�
247.4� 237.7� 703.1� 682.1� Selling and general expenses 14.5�
14.4� 16.9� 45.1� 46.7� Other operating loss/(income), net 0.3�
(0.7) (6.1) (0.9) (11.2) Operating income 65.7� 51.0� 51.0� 154.0�
147.2� Gain on sale of portion of New Zealand JV -� 7.8� -� 7.8� -�
Income from conti-nuing opera-tions, including gain on sale of
portion of New Zealand joint venture 65.7� 58.8� 51.0� 161.8�
147.2� Interest expense (11.0) (11.9) (9.8) (35.1) (35.0) Interest
and other income, net 3.0� 1.8� 11.9� 7.0� 13.4� Income before
taxes 57.7� 48.7� 53.1� 133.7� 125.6� Income tax (expense)/benefit
(2.7) (5.9) 21.8� (12.6) 25.7� Income from continuing operations $
55.0� $ 42.8� $ 74.9� $ 121.1� $ 151.3� Dis-continued oper-ations,
net -� -� 0.1� -� (24.9) Net income $ 55.0� $ 42.8� $ 75.0� $
121.1� $ 126.4� � Income per Common Share: Basic From conti-nuing
opera-tions $ 0.71� $ 0.56� $ 0.99� $ 1.58� $ 2.00� Net income $
0.71� $ 0.56� $ 0.99� $ 1.58� $ 1.67� Diluted From conti-nuing
opera-tions $ 0.70� $ 0.55� $ 0.96� $ 1.55� $ 1.95� Net income $
0.70� $ 0.55� $ 0.96� $ 1.55� $ 1.63� � Pro forma income from
conti-nuing opera-tions (a) � Adjusted basic EPS $ 0.64� $ 0.48� $
0.47� $ 1.43� $ 1.25� Adjusted diluted EPS $ 0.63� $ 0.47� $ 0.46�
$ 1.40� $ 1.23� � Weighted average Common Shares used for
determi-ning � Basic EPS 76,508,135� 76,465,269� 75,658,512�
76,421,839� 75,390,193� Diluted EPS 78,062,219� 77,969,132�
77,753,165� 78,039,382� 77,490,723� � (a) See Schedule H for a
reconciliation to the nearest GAAP measure. � � - C -� RAYONIER
BUSINESS SEGMENT SALES AND OPERATING INCOME (LOSS) SEPTEMBER 30,
2006 (unaudited) (millions of dollars) � Three Months Ended Nine
Months Ended Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30, 2006�
2006� 2005� 2006� 2005� Sales Timber $ 44.3� $ 61.1� $ 45.5� $
159.8� $ 151.9� Real Estate 46.3� 17.8� 27.6� 77.2� 65.9� �
Performance Fibers Cellulose specialties 120.3� 126.4� 114.8�
353.4� 323.9� Absorbent materials 43.2� 39.4� 44.3� 121.9� 131.4�
Total Performance Fibers 163.5� 165.8� 159.1� 475.3� 455.3� � Wood
Products 26.3� 32.2� 35.6� 90.1� 102.5� � Other Operations 31.7�
35.3� 32.1� 99.1� 89.9� � Intersegment eliminations (0.1) (0.1)
(0.4) (0.2) (0.7) � Total sales $ 312.0� $ 312.1� $ 299.5� $ 901.3�
$ 864.8� � Operating income/(loss) Timber $ 17.1� $ 29.8� $ 16.4� $
70.7� $ 63.2� � Real Estate 37.6� 10.9� 21.8� 58.7� 47.8� �
Performance Fibers 21.2� 15.7� 15.6� 47.2� 46.5� � Wood Products
(3.3) 2.0� 4.6� 1.3� 13.6� � Other Operations 0.1� 0.4� 0.6� 0.1�
0.4� � Corporate (7.1) (7.1) (10.2) (23.7) (26.1) � Intersegment
eliminations and other (Including Corporate FX) 0.1� (0.7) 2.2�
(0.3) 1.8� � Total operating income $ 65.7� $ 51.0� $ 51.0� $
154.0� $ 147.2� � � - D - RAYONIER CONDENSED CONSOLIDATED BALANCE
SHEETS AND STATEMENTS OF CASH FLOWS SEPTEMBER 30, 2006 (unaudited)
(millions of dollars) � CONDENSED CONSOLIDATED BALANCE SHEETS Sept.
30, Dec. 31, 2006� 2005� Assets Current assets $ 390.8� $ 354.1�
Timber, timberlands and logging roads, net of depletion and
amortization 906.9� 927.0� Property, plant and equipment 1,392.1�
1,352.4� Less - accumulated depreciation (1,032.2) (991.1) 359.9�
361.3� Investment in New Zealand JV 58.7� 81.7� Other assets 155.7�
115.0� $ 1,872.0� $ 1,839.1� Liabilities and Shareholders' Equity
Current liabilities $ 185.9� $ 170.1� Deferred income taxes 25.2�
32.2� Long-term debt 555.1� 555.2� Non-current reserves for
dispositions and discontinued operations 121.3� 128.0� Other
non-current liabilities 69.5� 68.7� Shareholders' equity 915.0�
884.9� $ 1,872.0� $ 1,839.1� � CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS Nine Months Ended Sept. 30, Sept. 30, 2006� 2005� Cash
provided by operating activities of continuing operations: Income
from continuing operations $ 121.1� $ 151.3� Depreciation,
depletion, amortization and non-cash cost basis of real estate sold
109.6� 119.6� Other non-cash items included in income (7.5) (34.0)
Changes in working capital and other assets and liabilities (0.9)
(30.8) 222.3� 206.1� Cash used for investing activities of
continuing operations: Capital expenditures, net of sales and
retirements (87.9) (51.5) Purchase of timberlands and properties
previously leased (30.5) (12.9) Proceeds from sale of portion of
New Zealand JV 21.7� -� Increase in restricted cash (3.6) (13.5)
Proceeds from matured energy forward contracts 0.9� -� (99.4)
(77.9) Cash used for financing activities: (Repayment)/borrowing of
debt, net (2.7) (67.8) Dividends paid (107.8) (93.5) Issuance of
common shares 7.0� 11.3� Repurchase of common shares (0.5) -�
Excess tax benefits from equity-based compensation(a) 2.5� -�
(101.5) (150.0) Effect of exchange rate changes on cash 1.2� (0.1)
Cash provided by discontinued operations -� 47.4� Cash and cash
equivalents: Increase in cash and cash equivalents 22.6� 25.5�
Balance, beginning of year 146.2� 84.1� Balance, end of period $
168.8� $ 109.6� � (a) SFAS No. 123R requires the excess tax
benefits on equity-based compensation to be included as a financing
activity. Since the Company did not adopt SFAS No. 123R until
January 1, 2006, no adjustment is required for the nine months
ended September 30, 2005. � - E - RAYONIER SELECTED SUPPLEMENTAL
FINANCIAL DATA SEPTEMBER 30, 2006 (unaudited) (millions of dollars)
� Three Months Ended Nine Months Ended Sept. 30, June 30, Sept. 30,
Sept. 30, Sept. 30, 2006� 2006� 2005� 2006� 2005� � Geographical
Data (Non-U.S.) Sales New Zealand $ 8.5� $ 8.2� $ 13.1� $ 22.2� $
36.1� Other 3.5� 3.7� 1.6� 11.7� 7.1� Total $ 12.0� $ 11.9� $ 14.7�
$ 33.9� $ 43.2� � Operating income (loss) New Zealand $ (0.1) $
(0.3) $ 1.5� $ (1.5) $ 3.0� Other (0.3) (0.5) (0.8) (1.2) (1.4)
Total $ (0.4) $ (0.8) $ 0.7� $ (2.7) $ 1.6� � Timber Sales
Northwest U.S. $ 24.4� $ 35.2� $ 18.8� $ 86.7� $ 71.1� Southeast
U.S. 17.2� 23.5� 19.1� 65.7� 61.6� New Zealand 2.7� 2.4� 7.6� 7.4�
19.2� Total $ 44.3� $ 61.1� $ 45.5� $ 159.8� $ 151.9� � Operating
income Northwest U.S. $ 12.6� $ 21.4� $ 8.8� $ 50.0� $ 41.2�
Southeast U.S. 4.3� 8.8� 5.9� 22.0� 18.1� New Zealand 0.2� (0.4)
1.7� (1.3) 3.9� Total $ 17.1� $ 29.8� $ 16.4� $ 70.7� $ 63.2� �
Adjusted EBITDA by Segment(a) Timber $ 27.3� $ 43.3� $ 31.0� $
109.4� $ 107.7� Real Estate 43.9� 15.5� 27.0� 70.9� 62.1�
Performance Fibers 40.9� 33.1� 35.2� 99.4� 100.9� Wood Products
(1.4) 3.8� 6.4� 6.7� 19.0� Other Operations 0.3� 0.5� 1.1� 0.6�
1.5� Corporate and other (6.7) (7.9) (0.1) (23.5) (16.2) Total $
104.3� $ 88.3� $ 100.6� $ 263.5� $ 275.0� � (a) Adjusted EBITDA is
a non-GAAP measure, see Schedule I for reconciliation to nearest
GAAP measure. � � � - F - RAYONIER SELECTED OPERATING INFORMATION
SEPTEMBER 30, 2006 (unaudited) � Three Months Ended Nine Months
Ended Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30, 2006� 2006�
2005� 2006� 2005� Timber Northwest U.S., in millions of board feet
59� 89� 48� 223� 193� Southeast U.S., in thousands of short green
tons 926� 1,204� 1,080� 3,377� 3,507� � Real Estate Acres sold
Development 4,606� 7� 2,411� 5,357� 4,937� Rural 1,426� 9,613�
7,930� 13,699� 22,107� Northwest U.S. 58� 4� 44� 62� 275� Total
6,090� 9,624� 10,385� 19,118� 27,319� � Performance Fibers Sales
Volume Cellulose specialties, in thousands of metric tons 112� 121�
120� 337� 340� Absorbent materials, in thousands of metric tons 68�
63� 65� 196� 201� Production as a percent of capacity 101.9% 99.2%
100.9% 100.1% 100.2% � Lumber Sales volume, in millions of board
feet 91� 92� 89� 267� 262� � � � � - G - RAYONIER RECONCILIATION OF
NON-GAAP MEASURES SEPTEMBER 30, 2006 (unaudited) (millions of
dollars, except per share information) � CASH AVAILABLE FOR
DISTRIBUTION: � Nine Months Ended Sept. 30, Sept. 30, 2006� 2005�
Cash provided by operating activities $ 222.3� $ 206.1� Capital
spending (a) (87.9) (51.5) Proceeds from matured forward energy
contracts 0.9� -� Decrease in committed cash 10.9� 10.0� Equity
based compensation adjustments 4.2� (1.0) Like-kind exchange tax
benefits on third party real estate sales (b) (4.1) (2.0) Cash
Available for Distribution $ 146.3� $ 161.6� � (a) Capital spending
is net of sales and retirements and excludes strategic acquisitions
and dispositions. (b) Represents taxes that would have been paid if
the Company had not completed LKE transactions. � PRO FORMA INCOME
FROM CONTINUING OPERATIONS: Three Months Ended Nine Months Ended
Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30, 2006� 2006� 2005�
2006� 2005� Income from Continuing Operations per Common Share
Basic EPS $ 0.71� $ 0.56� $ 0.99� $ 1.58� $ 2.00� Diluted EPS $
0.70� $ 0.55� $ 0.96� $ 1.55� $ 1.95� � Sale of portion of New
Zealand JV Basic EPS -� (0.08) -� (0.08) -� Diluted EPS -� (0.08)
-� (0.08) -� � IRS audit settlements including adjustment of
accrued interest � Basic EPS (0.07) -� (0.11) (0.07) (0.34) Diluted
EPS (0.07) -� (0.10) (0.07) (0.32) � Tax associated with
repatria-tion of foreign earnings � Basic EPS -� -� (0.34) -�
(0.34) Diluted EPS -� -� (0.33) -� (0.33) � Arbitration award Basic
EPS -� -� (0.07) -� (0.07) Diluted EPS -� -� (0.07) -� (0.07) � Pro
forma Income from Continuing Operations per Common Share � Adjusted
basic EPS $ 0.64� $ 0.48� $ 0.47� $ 1.43� $ 1.25� Adjusted diluted
EPS $ 0.63� $ 0.47� $ 0.46� $ 1.40� $ 1.23� � � � - H - RAYONIER
RECONCILIATION OF NON-GAAP MEASURES (a) SEPTEMBER 30, 2006
(unaudited) (millions of dollars) � ADJUSTED EBITDA: � Perfor-mance
Fibers Wood Prod-ucts Other Opera-tions Corp-orate and other Timber
Real Estate Total Three Months Ended September 30, 2006 Cash
provided by operating activities $ 24.7� $ 39.8� $ 37.7� $ 0.8� $
(2.0) $ (11.8) $ 89.2� Income tax expense -� -� -� -� -� 2.7� 2.7�
Interest, net -� -� -� -� -� 8.1� 8.1� Working capital increases
(decreases) (1.3) 0.7� 2.4� (2.2) 2.1� (14.8) (13.1) Other balance
sheet changes 3.9� 3.4� 0.8� -� 0.2� 9.1� 17.4� Adjusted EBITDA $
27.3� $ 43.9� $ 40.9� $ (1.4) $ 0.3� $ (6.7) $ 104.3� � June 30,
2006 Cash provided by operating activities $ 53.1� $ 18.3� $ 14.8�
$ 6.3� $ 7.1� $ (17.3) $ 82.3� Income tax expense -� -� -� -� -�
5.9� 5.9� Interest, net -� -� -� -� -� 9.9� 9.9� Working capital
increases (decreases) (6.8) (3.8) 18.5� (2.5) (6.4) (0.5) (1.5)
Other balance sheet changes (3.0) 1.0� (0.2) -� (0.2) (5.9) (8.3)
Adjusted EBITDA $ 43.3� $ 15.5� $ 33.1� $ 3.8� $ 0.5� $ (7.9) $
88.3� � September 30, 2005 Cash provided by operating activities $
32.0� $ 29.8� $ 19.6� $ 8.6� $ 2.5� $ (9.3) $ 83.2� Income tax
benefit -� -� -� -� -� (21.9) (21.9) Interest, net -� -� -� -� -�
5.7� 5.7� Working capital increases (decreases) (0.4) 1.0� 16.3�
(2.2) (1.4) (3.5) 9.8� Other balance sheet changes (0.6) (3.8)
(0.7) -� -� 28.9� 23.8� Adjusted EBITDA $ 31.0� $ 27.0� $ 35.2� $
6.4� $ 1.1� $ (0.1) $ 100.6� � Nine Months Ended September 30, 2006
Cash provided by operating activities $ 121.6� $ 65.6� $ 82.1� $
7.8� $ 5.6� $ (60.4) $ 222.3� Income tax expense -� -� -� -� -�
12.6� 12.6� Interest, net -� -� -� -� -� 28.0� 28.0� Working
capital increases (decreases) (3.6) 1.6� 16.7� (1.1) (5.2) (12.5)
(4.1) Other balance sheet changes (8.6) 3.7� 0.6� -� 0.2� 8.8� 4.7�
Adjusted EBITDA $ 109.4� $ 70.9� $ 99.4� $ 6.7� $ 0.6� $ (23.5) $
263.5� � September 30, 2005 Cash provided by operating activities $
115.1� $ 65.4� $ 74.3� $ 17.1� $ 1.0� $ (66.8) $ 206.1� Income tax
benefit -� -� -� -� -� (25.7) (25.7) Interest, net -� -� -� -� -�
29.0� 29.0� Working capital increases (decreases) (6.6) (1.3) 27.3�
1.9� (1.0) 9.6� 29.9� Other balance sheet changes (0.8) (2.0) (0.7)
-� 1.5� 37.7� 35.7� Adjusted EBITDA $ 107.7� $ 62.1� $ 100.9� $
19.0� $ 1.5� $ (16.2) $ 275.0� � (a) Unusual, non-trade
intercompany items between the segments have been eliminated. � � �
- I - RAYONIER RECONCILIATION OF STATUTORY INCOME TAX TO REPORTED
INCOME TAX SEPTEMBER 30, 2006 (unaudited) (millions of dollars,
except percentages) � Three Months Ended Nine Months Ended Sept.
30, June 30, Sept. 30, Sept. 30, Sept. 30, 2006� 2006� 2005� 2006�
2005� $ % $ % $ % $ % $ % � Income tax provision at the U.S.
statutory rate $ (20.2) (35.0) $ (17.0) (35.0) $ (18.6) (35.0) $
(46.8) (35.0) $ (44.0) (35.0) � REIT income not subject to federal
tax 14.4� 25.0� 11.4� 23.4� 10.4� 19.6� 33.8� 25.3� 28.8� 22.9� �
Lost deduction on REIT interest expense and overhead expenses
associated with REIT activities � (8.7) (6.5) (8.7) (6.8) (2.8)
(4.9) (2.7) (5.6) (3.2) (6.0) � Discrete items included in pretax
income -� -� -� -� 4.9� 6.5� (a) -� -� 4.9� 2.2� (a) � Foreign,
state and local income taxes, foreign exchange rate changes and
permanent differences � 0.5� 0.7� 1.5� 3.2� 2.3� 4.3� 2.3� 1.6�
3.5� 2.8� � Income tax (expense) benefit before discrete items $
(8.1) (14.2) $ (6.8) (14.0) $ (4.2) (10.6) $ (19.4) (14.6) $ (15.5)
(13.9) � Favorable IRS audit settlements 4.8� 8.3� -� -� 3.1� 6.9�
(a) 5.3� 4.0� 19.8� 16.4� (a) � Reversal of prior year built-in
gain reserve 2.8� 4.9� -� -� -� -� 2.8� 2.1� -� -� � Return to
accrual adjustments (1.2) (2.1) 0.9� 1.9� (0.1) (0.2) (0.3) (0.2)
(0.1) (0.1) � Prior year foreign tax credit reserve (1.0) (1.7) -�
-� -� -� (1.0) (0.7) -� -� � U.S. tax benefit on repatriation of
foreign earnings -� -� -� -� 25.8� 48.6� -� -� 25.8� 20.5� � Tax on
favorable arbitration award -� -� -� -� (3.0) (3.9) (a) -� -� (3.0)
(1.4) (a) � Exchange rate changes on tax on undistributed foreign
earnings � -� -� -� -� 0.2� 0.4� -� -� 1.6� 1.3� �
Non-realizability of New Zealand tax credits on U.S. withholding
tax for prior years' intercompany note interest � � -� -� -� -� -�
-� -� -� (2.9) (2.4) � Income tax (expense) benefit $ (2.7) (4.8) $
(5.9) (12.1) $ 21.8� 41.2� $ (12.6) (9.4) $ 25.7� 20.4� � (a)
Adjusted for change in pretax income due to discrete items. � - J -
� Rayonier (NYSE:RYN) today reported third quarter net income of
$55.0 million, or 70 cents per share. This compares to $42.8
million, or 55 cents per share, in the second quarter and $75.0
million, or 96 cents per share, in third quarter 2005. Results
included a special item gain of $5.3 million, or 7 cents per share,
for prior years' IRS audit settlements, including associated
interest expense. Second quarter included a special item gain of
$6.5 million, or 8 cents per share, while third quarter 2005
included three special item gains totaling $39.1 million, or 50
cents per share. Lee Nutter, Chairman, President and CEO, said: "As
expected, results were very good, reflecting the balance of our
three core businesses. Particularly strong results were achieved by
Performance Fibers, which continues to experience growing demand
for its high-value cellulose specialties, and our Real Estate
business, which closed several significant transactions - including
our first participation agreement. In addition to realizing
immediate proceeds from the sale, the agreement allows us to share
in future revenues generated from the developed property." Third
quarter results, excluding special items, were above the second
quarter primarily due to the increased value of real estate
transactions and reduced performance fibers costs, partly offset by
a normal seasonal decline in Northwest timber sales volume and
lower prices. Compared to third quarter 2005, earnings improved
primarily due to higher real estate sales and stronger cellulose
specialties prices, partly offset by lumber prices. Sales for the
third quarter of $312 million were comparable to the second quarter
and $13 million above third quarter 2005. Cash provided by
operating activities of $222 million for the nine months ended
September 30 was $16 million above the comparable period in 2005
primarily due to lower working capital requirements. For the same
period, Cash Available for Distribution (CAD) of $146 million was
$15 million below 2005 mainly due to capital spending for a major
energy cost reduction project, partly offset by reduced working
capital requirements. (CAD is a non-GAAP measure defined and
reconciled to GAAP in the attached exhibits.) Debt of $556 million
and a debt-to-capital ratio of 37.8 percent at quarter-end were $2
million and 0.9 percent below year-end 2005, respectively. Cash at
September 30 was $169 million. Timber Sales of $44 million and
operating income of $17 million were $17 million and $13 million
below second quarter, respectively, primarily due to the normal
seasonal decline in the Northwest and unfavorable volume and price
in the Southeast, but were comparable to third quarter 2005. Real
Estate Sales of $46 million and operating income of $38 million
were $29 million and $27 million above second quarter,
respectively, due to a significant increase in the number of higher
value development acres sold, partly offset by fewer rural acres
sold. Sales and operating income rose $19 million and $16 million,
respectively, over third quarter 2005, due to an increase in both
the quantity and per acre price of development acres sold,
partially offset by fewer rural acres sold. The strong average per
acre price for development property primarily was due to location.
Performance Fibers Sales of $164 million were $2 million below
second quarter but operating income increased $6 million to $21
million primarily due to improved production resulting in lower
manufacturing costs, partially offset by sales mix. Compared to
third quarter 2005, sales increased $4 million mainly due to higher
cellulose specialties prices, partly offset by the sales mix.
Operating income improved $6 million primarily due to the higher
cellulose specialties prices, partly offset by energy costs. Wood
Products Due to a dramatic drop in lumber prices, sales of $26
million and an operating loss of $3 million were $6 million and $5
million below second quarter, respectively, and $9 million and $8
million below third quarter 2005. Other Operations Sales of $32
million were $4 million below second quarter while essentially
breakeven operating income was unchanged. Sales and operating
income were basically unchanged from third quarter 2005. Other
Items Corporate expenses of $7.1 million were comparable to second
quarter and $3.1 million below third quarter 2005, primarily due to
lower stock price-based incentive compensation. Interest expense of
$11.0 million was $0.9 million below second quarter primarily due
to lower tax interest expense, but $1.2 million above third quarter
2005 mainly due to increased tax interest expense and higher
interest rates. Interest and other income of $3.0 million was $1.2
million above second quarter mainly due to higher interest income,
but $8.9 million below third quarter 2005, largely due to an
arbitration award in that quarter. Excluding discrete items, the
year-to-date effective tax rate was 14.6 percent compared to 13.9
percent for the same period in 2005 due to the absence of research
and development credits. The third quarter tax expense of $2.7
million included the previously noted favorable settlement of tax
audits for prior years of $4.8 million (excluding interest).
Additionally, three other discrete items netted to a $0.6 million
benefit in the quarter (see Schedule J for details). Outlook The
company said it continues to expect that full year earnings will be
above 2005. Fourth quarter results should be less than the third
quarter (excluding special items), primarily due to lower real
estate sales, but somewhat above fourth quarter 2005 because of
higher cellulose specialties prices, reduced Performance Fibers
costs and increased real estate sales, partly offset by weaker
lumber prices. "Although real estate and timber markets are
somewhat uncertain, we remain optimistic given the mix of our
businesses, their geographic breadth and the balance they provide,"
Nutter said. "Global demand remains exceptionally strong for our
high-value specialty cellulose products and is expected to result
in significant price improvement with the completion of annual
pricing negotiations under multi-year contracts. In Real Estate, we
will continue to focus on maximizing the value of our diverse
properties, including the pursuit of additional participation
transactions. Although our Timber business has begun to feel some
effects of the housing slowdown, we expect the impact will be
softened somewhat by the geographical diversity of our holdings."
About Rayonier Rayonier is a leading international forest products
company with three core businesses: Timber, Real Estate and
Performance Fibers. It owns, leases or manages 2.5 million acres of
timber and land in the U.S., New Zealand and Australia. The
company's holdings include approximately 200,000 acres with
residential and commercial development potential along the
fast-growing Interstate 95 corridor between Savannah, Georgia, and
Daytona Beach, Florida. Its Performance Fibers business is the
world's leading producer of high-value specialty cellulose.
Approximately 40 percent of the company's sales are outside the
U.S. to customers in more than 50 countries. Except for historical
information, the statements made in this press release are
"forward-looking statements" made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995
and other federal securities laws. These forward-looking
statements, which include statements regarding anticipated
earnings, revenues, volumes, pricing, costs and other statements
relating to Rayonier's financial and operational performance, in
some cases are identified by the use of words such as "may,"
"will," "should," "expect," "estimate," "believe," "anticipate" and
other similar language. The following important factors, among
others, could cause actual results to differ materially from those
expressed in the forward-looking statements contained in this
release: changes in global market trends and world events; interest
rate and currency movements; fluctuations in demand for, or supply
of, cellulose specialty products, absorbent materials, timber, wood
products or real estate and entry of new competitors into these
markets; adverse weather conditions affecting production, timber
availability and sales, or distribution; changes in production
costs for wood products or performance fibers, particularly for raw
materials such as wood, energy and chemicals; unexpected delays in
the entry into or closing of real estate sale transactions; changes
in law, policy or political environment that might condition, limit
or restrict the development of real estate; the ability of the
company to identify and complete timberland and higher-value real
estate acquisitions; the company's ability to continue to qualify
as a REIT; the ability of the company to complete tax-efficient
exchanges of real estate; and implementation or revision of
governmental policies and regulations affecting the environment,
endangered species, timber harvesting, import and export controls
or taxes, including changes in tax laws that could reduce the
benefits associated with REIT status. For additional factors that
could impact future results, please see the company's most recent
Form 10-K on file with the Securities and Exchange Commission.
Rayonier assumes no obligation to update these statements except as
may be required by law. A conference call will be held on Tuesday,
October 24, at 2:00 p.m. EDT to discuss these results. Interested
parties are invited to listen to the live webcast by logging onto
www.rayonier.com and following the link. Supplemental materials
will be available at the website. A replay will be available on the
site shortly after the call where it will be archived for one
month. Also, investors may access the "listen only" conference call
by dialing 913-981-5584. For further information, visit the
company's web site at www.rayonier.com. Complimentary copies of
Rayonier press releases and other financial documents are also
available by mail or fax by calling 1-800-RYN-7611. -0- *T RAYONIER
FINANCIAL HIGHLIGHTS SEPTEMBER 30, 2006 (unaudited) (millions of
dollars, except per share information) Three Months Ended Nine
Months Ended ----------------------------------------------------
Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30, 2006 2006 2005
2006 2005 --------- --------- --------------------------------
Profitability Sales $312.0 $312.1 $299.5 $901.3 $864.8 Operating
income $65.7 $51.0 $51.0 $154.0 $147.2 Income from continuing
operations $55.0 $42.8 $74.9 $121.1 $151.3 Discontinued operations
$- $- $0.1 $- $(24.9) Net income $55.0 $42.8 $75.0 $121.1 $126.4
Income per diluted common share Continuing operations $0.70 $0.55
$0.96 $1.55 $1.95 Net income $0.70 $0.55 $0.96 $1.55 $1.63 Pro
forma income from continuing operations (a) $0.63 $0.47 $0.46 $1.40
$1.23 Operating income as a percent of sales 21.1% 16.3% 17.0%
17.1% 17.0% ROE (b) 15.0% 12.9% 14.7% 15.0% 14.7% Nine Months Ended
Sept. 30, --------------------------- 2006 2005 ------------
----------- Capital Resources and Liquidity Continuing operations:
Cash provided by operating activities $222.3 $206.1 Cash used for
investing activities $(99.4) $(77.9) Cash used for financing
activities $(101.5) $(150.0) Adjusted EBITDA (c) (e) $263.5 $275.0
Cash Available for Distribution (CAD) (d) (e) $146.3 $161.6
(Repayment)/borrowing of debt, net $(2.7) $(67.8) 09/30/06 12/31/05
------------ ----------- Debt $556.3 $558.5 Debt / capital 37.8%
38.7% Cash $168.8 $146.2 Average diluted shares outstanding
(millions) 78.0 77.6 (a), (b), (c), (d) and (e), see Schedule B. -
A - *T -0- *T RAYONIER FOOTNOTES FOR SCHEDULE A SEPTEMBER 30, 2006
(unaudited) (a) Pro forma income from continuing operations is a
non-GAAP measure. See Schedule H for reconciliation to the nearest
GAAP measure. (b) Year-to-date percentages are annualized; major
land sales are not. (c) Adjusted EBITDA is defined as earnings from
continuing operations before interest, taxes, depreciation,
depletion, amortization and the non-cash cost basis of real estate
sold. Adjusted EBITDA is a non-GAAP measure of operating cash
generating capacity of the Company. See reconciliation on Schedule
I. (d) Cash Available for Distribution (CAD) is defined as cash
provided by operating activities of continuing operations less
capital spending, adjusted for equity based compensation amounts,
proceeds from matured energy forward contracts, the tax benefits
associated with certain strategic acquisitions and the change in
committed cash. CAD is a non-GAAP measure of cash generated during
a period that is available for dividend distribution, repurchase of
the Company's common shares, debt reduction and for strategic
acquisitions net of associated financing. See reconciliation on
Schedule H. (e) Management considers these measures to be important
to estimate the enterprise and shareholder values of the Company as
a whole and of its core segments, and for allocating capital
resources. In addition, analysts, investors and creditors use these
measures when analyzing the financial condition and cash generating
ability of the Company. - B - *T -0- *T RAYONIER CONDENSED
STATEMENTS OF CONSOLIDATED INCOME SEPTEMBER 30, 2006 (unaudited)
(millions of dollars, except per share information) Three Months
Ended Nine Months Ended -----------------------------------
----------------------- Sept. 30, June 30, Sept. 30, Sept. 30,
Sept. 30, 2006 2006 2005 2006 2005 ----------- -----------
----------- ----------- ----------- Sales $312.0 $312.1 $299.5
$901.3 $864.8 ----------- ----------- ----------- -----------
----------- Costs and expenses Cost of sales 231.5 247.4 237.7
703.1 682.1 Selling and general expenses 14.5 14.4 16.9 45.1 46.7
Other operating loss/ (income), net 0.3 (0.7) (6.1) (0.9) (11.2)
----------- ----------- ----------- ----------- -----------
Operating income 65.7 51.0 51.0 154.0 147.2 Gain on sale of portion
of New Zealand JV - 7.8 - 7.8 - ----------- ----------- -----------
----------- ----------- Income from conti- nuing opera- tions,
including gain on sale of portion of New Zealand joint venture 65.7
58.8 51.0 161.8 147.2 Interest expense (11.0) (11.9) (9.8) (35.1)
(35.0) Interest and other income, net 3.0 1.8 11.9 7.0 13.4
----------- ----------- ----------- ----------- ----------- Income
before taxes 57.7 48.7 53.1 133.7 125.6 Income tax (expense)/
benefit (2.7) (5.9) 21.8 (12.6) 25.7 ----------- -----------
----------- ----------- ----------- Income from continuing
operations $55.0 $42.8 $74.9 $121.1 $151.3 Dis- continued oper-
ations, net - - 0.1 - (24.9) ----------- ----------- -----------
----------- ----------- Net income $55.0 $42.8 $75.0 $121.1 $126.4
=========== =========== =========== =========== =========== Income
per Common Share: Basic From conti- nuing opera- tions $0.71 $0.56
$0.99 $1.58 $2.00 =========== =========== =========== ===========
=========== Net income $0.71 $0.56 $0.99 $1.58 $1.67 ===========
=========== =========== =========== =========== Diluted From conti-
nuing opera- tions $0.70 $0.55 $0.96 $1.55 $1.95 ===========
=========== =========== =========== =========== Net income $0.70
$0.55 $0.96 $1.55 $1.63 =========== =========== ===========
=========== =========== Pro forma income from conti- nuing opera-
tions (a) Adjusted basic EPS $0.64 $0.48 $0.47 $1.43 $1.25
=========== =========== =========== =========== ===========
Adjusted diluted EPS $0.63 $0.47 $0.46 $1.40 $1.23 ===========
=========== =========== =========== =========== Weighted average
Common Shares used for determi- ning Basic EPS 76,508,135
76,465,269 75,658,512 76,421,839 75,390,193 =========== ===========
=========== =========== =========== Diluted EPS 78,062,219
77,969,132 77,753,165 78,039,382 77,490,723 =========== ===========
=========== =========== =========== (a) See Schedule H for a
reconciliation to the nearest GAAP measure. - C - *T -0- *T
RAYONIER BUSINESS SEGMENT SALES AND OPERATING INCOME (LOSS)
SEPTEMBER 30, 2006 (unaudited) (millions of dollars) Three Months
Ended Nine Months Ended -------------------------------
--------------------- Sept. 30, June 30, Sept. 30, Sept. 30, Sept.
30, 2006 2006 2005 2006 2005 ---------- --------- ----------
---------- ---------- Sales Timber $44.3 $61.1 $45.5 $159.8 $151.9
Real Estate 46.3 17.8 27.6 77.2 65.9 Performance Fibers Cellulose
specialties 120.3 126.4 114.8 353.4 323.9 Absorbent materials 43.2
39.4 44.3 121.9 131.4 ---------- --------- ---------- ----------
---------- Total Performance Fibers 163.5 165.8 159.1 475.3 455.3
---------- --------- ---------- ---------- ---------- Wood Products
26.3 32.2 35.6 90.1 102.5 Other Operations 31.7 35.3 32.1 99.1 89.9
Intersegment eliminations (0.1) (0.1) (0.4) (0.2) (0.7) ----------
--------- ---------- ---------- ---------- Total sales $312.0
$312.1 $299.5 $901.3 $864.8 ========== ========= ==========
========== ========== Operating income/(loss) Timber $17.1 $29.8
$16.4 $70.7 $63.2 Real Estate 37.6 10.9 21.8 58.7 47.8 Performance
Fibers 21.2 15.7 15.6 47.2 46.5 Wood Products (3.3) 2.0 4.6 1.3
13.6 Other Operations 0.1 0.4 0.6 0.1 0.4 Corporate (7.1) (7.1)
(10.2) (23.7) (26.1) Intersegment eliminations and other (Including
Corporate FX) 0.1 (0.7) 2.2 (0.3) 1.8 ---------- ---------
---------- ---------- ---------- Total operating income $65.7 $51.0
$51.0 $154.0 $147.2 ========== ========= ========== ==========
========== - D - *T -0- *T RAYONIER CONDENSED CONSOLIDATED BALANCE
SHEETS AND STATEMENTS OF CASH FLOWS SEPTEMBER 30, 2006 (unaudited)
(millions of dollars) CONDENSED CONSOLIDATED BALANCE SHEETS Sept.
30, Dec. 31, 2006 2005 ------------ ----------- Assets Current
assets $390.8 $354.1 Timber, timberlands and logging roads, net of
depletion and amortization 906.9 927.0 Property, plant and
equipment 1,392.1 1,352.4 Less - accumulated depreciation (1,032.2)
(991.1) ------------ ----------- 359.9 361.3 ------------
----------- Investment in New Zealand JV 58.7 81.7 Other assets
155.7 115.0 ------------ ----------- $1,872.0 $1,839.1 ============
=========== Liabilities and Shareholders' Equity Current
liabilities $185.9 $170.1 Deferred income taxes 25.2 32.2 Long-term
debt 555.1 555.2 Non-current reserves for dispositions and
discontinued operations 121.3 128.0 Other non-current liabilities
69.5 68.7 Shareholders' equity 915.0 884.9 ------------ -----------
$1,872.0 $1,839.1 ============ =========== CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS Nine Months Ended ------------------------
Sept. 30, Sept. 30, 2006 2005 ------------ ----------- Cash
provided by operating activities of continuing operations: Income
from continuing operations $121.1 $151.3 Depreciation, depletion,
amortization and non-cash cost basis of real estate sold 109.6
119.6 Other non-cash items included in income (7.5) (34.0) Changes
in working capital and other assets and liabilities (0.9) (30.8)
------------ ----------- 222.3 206.1 ------------ ----------- Cash
used for investing activities of continuing operations: Capital
expenditures, net of sales and retirements (87.9) (51.5) Purchase
of timberlands and properties previously leased (30.5) (12.9)
Proceeds from sale of portion of New Zealand JV 21.7 - Increase in
restricted cash (3.6) (13.5) Proceeds from matured energy forward
contracts 0.9 - ------------ ----------- (99.4) (77.9) ------------
----------- Cash used for financing activities:
(Repayment)/borrowing of debt, net (2.7) (67.8) Dividends paid
(107.8) (93.5) Issuance of common shares 7.0 11.3 Repurchase of
common shares (0.5) - Excess tax benefits from equity-based
compensation(a) 2.5 - ------------ ----------- (101.5) (150.0)
------------ ----------- Effect of exchange rate changes on cash
1.2 (0.1) ------------ ----------- Cash provided by discontinued
operations - 47.4 ------------ ----------- Cash and cash
equivalents: Increase in cash and cash equivalents 22.6 25.5
Balance, beginning of year 146.2 84.1 ------------ -----------
Balance, end of period $168.8 $109.6 ============ =========== (a)
SFAS No. 123R requires the excess tax benefits on equity-based
compensation to be included as a financing activity. Since the
Company did not adopt SFAS No. 123R until January 1, 2006, no
adjustment is required for the nine months ended September 30,
2005. - E - *T -0- *T RAYONIER SELECTED SUPPLEMENTAL FINANCIAL DATA
SEPTEMBER 30, 2006 (unaudited) (millions of dollars) Three Months
Ended Nine Months Ended --------------------------------
--------------------- Sept. 30, June 30, Sept. 30, Sept. 30, Sept.
30, 2006 2006 2005 2006 2005 ----------- --------- ----------
---------- ---------- Geographical Data (Non- U.S.) Sales New
Zealand $8.5 $8.2 $13.1 $22.2 $36.1 Other 3.5 3.7 1.6 11.7 7.1
----------- --------- ---------- ---------- ---------- Total $12.0
$11.9 $14.7 $33.9 $43.2 =========== ========= ========== ==========
========== Operating income (loss) New Zealand $(0.1) $(0.3) $1.5
$(1.5) $3.0 Other (0.3) (0.5) (0.8) (1.2) (1.4) -----------
--------- ---------- ---------- ---------- Total $(0.4) $(0.8) $0.7
$(2.7) $1.6 =========== ========= ========== ========== ==========
Timber Sales Northwest U.S. $24.4 $35.2 $18.8 $86.7 $71.1 Southeast
U.S. 17.2 23.5 19.1 65.7 61.6 New Zealand 2.7 2.4 7.6 7.4 19.2
----------- --------- ---------- ---------- ---------- Total $44.3
$61.1 $45.5 $159.8 $151.9 =========== ========= ==========
========== ========== Operating income Northwest U.S. $12.6 $21.4
$8.8 $50.0 $41.2 Southeast U.S. 4.3 8.8 5.9 22.0 18.1 New Zealand
0.2 (0.4) 1.7 (1.3) 3.9 ----------- --------- ---------- ----------
---------- Total $17.1 $29.8 $16.4 $70.7 $63.2 ===========
========= ========== ========== ========== Adjusted EBITDA by
Segment(a) Timber $27.3 $43.3 $31.0 $109.4 $107.7 Real Estate 43.9
15.5 27.0 70.9 62.1 Performance Fibers 40.9 33.1 35.2 99.4 100.9
Wood Products (1.4) 3.8 6.4 6.7 19.0 Other Operations 0.3 0.5 1.1
0.6 1.5 Corporate and other (6.7) (7.9) (0.1) (23.5) (16.2)
----------- --------- ---------- ---------- ---------- Total $104.3
$88.3 $100.6 $263.5 $275.0 =========== ========= ==========
========== ========== (a) Adjusted EBITDA is a non-GAAP measure,
see Schedule I for reconciliation to nearest GAAP measure. - F - *T
-0- *T RAYONIER SELECTED OPERATING INFORMATION SEPTEMBER 30, 2006
(unaudited) Three Months Ended Nine Months Ended
------------------------------- --------------------- Sept. 30,
June 30, Sept. 30, Sept. 30, Sept. 30, 2006 2006 2005 2006 2005
---------- --------- ---------- ---------- ---------- Timber
Northwest U.S., in millions of board feet 59 89 48 223 193
Southeast U.S., in thousands of short green tons 926 1,204 1,080
3,377 3,507 Real Estate Acres sold Development 4,606 7 2,411 5,357
4,937 Rural 1,426 9,613 7,930 13,699 22,107 Northwest U.S. 58 4 44
62 275 ---------- --------- ---------- ---------- ---------- Total
6,090 9,624 10,385 19,118 27,319 Performance Fibers Sales Volume
Cellulose specialties, in thousands of metric tons 112 121 120 337
340 Absorbent materials, in thousands of metric tons 68 63 65 196
201 Production as a percent of capacity 101.9% 99.2% 100.9% 100.1%
100.2% Lumber Sales volume, in millions of board feet 91 92 89 267
262 - G - *T -0- *T RAYONIER RECONCILIATION OF NON-GAAP MEASURES
SEPTEMBER 30, 2006 (unaudited) (millions of dollars, except per
share information) CASH AVAILABLE FOR DISTRIBUTION: Nine Months
Ended ---------------------- Sept. 30, Sept. 30, 2006 2005
---------- ---------- Cash provided by operating activities $222.3
$206.1 Capital spending (a) (87.9) (51.5) Proceeds from matured
forward energy contracts 0.9 - Decrease in committed cash 10.9 10.0
Equity based compensation adjustments 4.2 (1.0) Like-kind exchange
tax benefits on third party real estate sales (b) (4.1) (2.0)
---------- ---------- Cash Available for Distribution $146.3 $161.6
========== ========== (a) Capital spending is net of sales and
retirements and excludes strategic acquisitions and dispositions.
(b) Represents taxes that would have been paid if the Company had
not completed LKE transactions. PRO FORMA INCOME FROM CONTINUING
OPERATIONS: Three Months Ended Nine Months Ended
-------------------------------- --------------------- Sept. 30,
June 30, Sept. 30, Sept. 30, Sept. 30, 2006 2006 2005 2006 2005
---------- ---------- ---------- ---------- ---------- Income from
Continuing Operations per Common Share Basic EPS $0.71 $0.56 $0.99
$1.58 $2.00 ========== ========== ========== ========== ==========
Diluted EPS $0.70 $0.55 $0.96 $1.55 $1.95 ========== ==========
========== ========== ========== Sale of portion of New Zealand JV
Basic EPS - (0.08) - (0.08) - ========== ========== ==========
========== ========== Diluted EPS - (0.08) - (0.08) - ==========
========== ========== ========== ========== IRS audit settlements
including adjustment of accrued interest Basic EPS (0.07) - (0.11)
(0.07) (0.34) ========== ========== ========== ==========
========== Diluted EPS (0.07) - (0.10) (0.07) (0.32) ==========
========== ========== ========== ========== Tax associated with
repatria- tion of foreign earnings Basic EPS - - (0.34) - (0.34)
========== ========== ========== ========== ========== Diluted EPS
- - (0.33) - (0.33) ========== ========== ========== ==========
========== Arbitration award Basic EPS - - (0.07) - (0.07)
========== ========== ========== ========== ========== Diluted EPS
- - (0.07) - (0.07) ========== ========== ========== ==========
========== Pro forma Income from Continuing Operations per Common
Share Adjusted basic EPS $0.64 $0.48 $0.47 $1.43 $1.25 ==========
========== ========== ========== ========== Adjusted diluted EPS
$0.63 $0.47 $0.46 $1.40 $1.23 ========== ========== ==========
========== ========== - H - *T -0- *T RAYONIER RECONCILIATION OF
NON-GAAP MEASURES (a) SEPTEMBER 30, 2006 (unaudited) (millions of
dollars) ADJUSTED EBITDA: Corp- Perfor- Wood Other orate Real mance
Prod- Opera- and Timber Estate Fibers ucts tions other Total
------- -------- -------- ------ ------- ------- ------- Three
Months Ended September 30, 2006 Cash provided by operating
activities $24.7 $39.8 $37.7 $0.8 $(2.0) $(11.8) $89.2 Income tax
expense - - - - - 2.7 2.7 Interest, net - - - - - 8.1 8.1 Working
capital increases (decreases) (1.3) 0.7 2.4 (2.2) 2.1 (14.8) (13.1)
Other balance sheet changes 3.9 3.4 0.8 - 0.2 9.1 17.4 -------
-------- -------- ------ ------- ------- ------- Adjusted EBITDA
$27.3 $43.9 $40.9 $(1.4) $0.3 $(6.7) $104.3 ======= ========
======== ====== ======= ======= ======= June 30, 2006 Cash provided
by operating activities $53.1 $18.3 $14.8 $6.3 $7.1 $(17.3) $82.3
Income tax expense - - - - - 5.9 5.9 Interest, net - - - - - 9.9
9.9 Working capital increases (decreases) (6.8) (3.8) 18.5 (2.5)
(6.4) (0.5) (1.5) Other balance sheet changes (3.0) 1.0 (0.2) -
(0.2) (5.9) (8.3) ------- -------- -------- ------ ------- -------
------- Adjusted EBITDA $43.3 $15.5 $33.1 $3.8 $0.5 $(7.9) $88.3
======= ======== ======== ====== ======= ======= ======= September
30, 2005 Cash provided by operating activities $32.0 $29.8 $19.6
$8.6 $2.5 $(9.3) $83.2 Income tax benefit - - - - - (21.9) (21.9)
Interest, net - - - - - 5.7 5.7 Working capital increases
(decreases) (0.4) 1.0 16.3 (2.2) (1.4) (3.5) 9.8 Other balance
sheet changes (0.6) (3.8) (0.7) - - 28.9 23.8 ------- --------
-------- ------ ------- ------- ------- Adjusted EBITDA $31.0 $27.0
$35.2 $6.4 $1.1 $(0.1) $100.6 ======= ======== ======== ======
======= ======= ======= Nine Months Ended September 30, 2006 Cash
provided by operating activities $121.6 $65.6 $82.1 $7.8 $5.6
$(60.4) $222.3 Income tax expense - - - - - 12.6 12.6 Interest, net
- - - - - 28.0 28.0 Working capital increases (decreases) (3.6) 1.6
16.7 (1.1) (5.2) (12.5) (4.1) Other balance sheet changes (8.6) 3.7
0.6 - 0.2 8.8 4.7 ------- -------- -------- ------ ------- -------
------- Adjusted EBITDA $109.4 $70.9 $99.4 $6.7 $0.6 $(23.5) $263.5
======= ======== ======== ====== ======= ======= ======= September
30, 2005 Cash provided by operating activities $115.1 $65.4 $74.3
$17.1 $1.0 $(66.8) $206.1 Income tax benefit - - - - - (25.7)
(25.7) Interest, net - - - - - 29.0 29.0 Working capital increases
(decreases) (6.6) (1.3) 27.3 1.9 (1.0) 9.6 29.9 Other balance sheet
changes (0.8) (2.0) (0.7) - 1.5 37.7 35.7 ------- -------- --------
------ ------- ------- ------- Adjusted EBITDA $107.7 $62.1 $100.9
$19.0 $1.5 $(16.2) $275.0 ======= ======== ======== ====== =======
======= ======= (a) Unusual, non-trade intercompany items between
the segments have been eliminated. - I - *T -0- *T RAYONIER
RECONCILIATION OF STATUTORY INCOME TAX TO REPORTED INCOME TAX
SEPTEMBER 30, 2006 (unaudited) (millions of dollars, except
percentages) Three Months Ended
-------------------------------------------- Sept. 30, June 30,
Sept. 30, 2006 2006 2005 -------------- --------------
-------------- $ % $ % $ % ------- ------ ------- ------ -------
------ Income tax provision at the U.S. statutory rate $(20.2)
(35.0) $(17.0) (35.0) $(18.6) (35.0) REIT income not subject to
federal tax 14.4 25.0 11.4 23.4 10.4 19.6 Lost deduction on REIT
interest expense and overhead expenses associated with REIT
activities (2.8) (4.9) (2.7) (5.6) (3.2) (6.0) Discrete items
included in pretax income - - - - 4.9 6.5 (a) Foreign, state and
local income taxes, foreign exchange rate changes and permanent
differences 0.5 0.7 1.5 3.2 2.3 4.3 ------- ------ ------- ------
------- ------ Income tax (expense) benefit before discrete items
$(8.1) (14.2) $(6.8) (14.0) $(4.2) (10.6) Favorable IRS audit
settlements 4.8 8.3 - - 3.1 6.9 (a) Reversal of prior year built-in
gain reserve 2.8 4.9 - - - - Return to accrual adjustments (1.2)
(2.1) 0.9 1.9 (0.1) (0.2) Prior year foreign tax credit reserve
(1.0) (1.7) - - - - U.S. tax benefit on repatriation of foreign
earnings - - - - 25.8 48.6 Tax on favorable arbitration award - - -
- (3.0) (3.9)(a) Exchange rate changes on tax on undistributed
foreign earnings - - - - 0.2 0.4 Non-realizability of New Zealand
tax credits on U.S. withholding tax for prior years' intercompany
note interest - - - - - - ------- ------ ------- ------ -------
------ Income tax (expense) benefit $(2.7) (4.8) $(5.9) (12.1)
$21.8 41.2 ======= ====== ======= ====== ======= ====== (a)
Adjusted for change in pretax income due to discrete items. Nine
Months Ended ------------------------------ Sept. 30, Sept. 30,
2006 2005 --------------- -------------- $ % $ % -------- ------
------- ------ Income tax provision at the U.S. statutory rate
$(46.8) (35.0) $(44.0) (35.0) REIT income not subject to federal
tax 33.8 25.3 28.8 22.9 Lost deduction on REIT interest expense and
overhead expenses associated with REIT activities (8.7) (6.5) (8.7)
(6.8) Discrete items included in pretax income - - 4.9 2.2 (a)
Foreign, state and local income taxes, foreign exchange rate
changes and permanent differences 2.3 1.6 3.5 2.8 -------- ------
------- ------ Income tax (expense) benefit before discrete items
$(19.4) (14.6) $(15.5) (13.9) Favorable IRS audit settlements 5.3
4.0 19.8 16.4 (a) Reversal of prior year built-in gain reserve 2.8
2.1 - - Return to accrual adjustments (0.3) (0.2) (0.1) (0.1) Prior
year foreign tax credit reserve (1.0) (0.7) - - U.S. tax benefit on
repatriation of foreign earnings - - 25.8 20.5 Tax on favorable
arbitration award - - (3.0) (1.4)(a) Exchange rate changes on tax
on undistributed foreign earnings - - 1.6 1.3 Non-realizability of
New Zealand tax credits on U.S. withholding tax for prior years'
intercompany note interest - - (2.9) (2.4) -------- ------ -------
------ Income tax (expense) benefit $(12.6) (9.4) $25.7 20.4
======== ====== ======= ====== (a) Adjusted for change in pretax
income due to discrete items. - J - *T
Rayonier (NYSE:RYN)
Gráfico Histórico do Ativo
De Jun 2024 até Jul 2024
Rayonier (NYSE:RYN)
Gráfico Histórico do Ativo
De Jul 2023 até Jul 2024